OPINION: The Mayor’s required reading

On the eve of the Fourth of July, Anchorage Mayor Ethan Berkowitz urged people to read the Declaration of Independence. Unlike a lot of what he tells me to do, like not be out after midnight, I looked forward to it. I always enjoy reading the Declaration of Independence. Unlike the Constitution, which is more of an eat-your-peas documentary, the Declaration is the classic summer popcorn feature arc of three acts that grabs you from the beginning and closes with a flourish. It is the freaking “Die Hard” of calligraphy and cursive on parchment. Many people quote their go-to passages as “all men are created equal” or “we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.” My favorite is this: “Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.” In his encouragement to read the nation’s founding declaration, Berkowitz remarked that it is a “pretty radical” document. Indeed it is, which makes one wonder if he has ever actually read it. And you know what you tell anybody who hasn’t seen “Die Hard.” They have to do it. Hours later, after using the president of the state’s hospitality industry as a hapless prop in his press conference where he paid lip service to the principles of our founding, the Berkowitz administration dropped a list of establishments from Palmer to Seward where people who have tested positive for the ‘rona have visited in a naked attempt to kill their business before a traditional weekend of celebration. His administration declared the municipality’s health capacity was at a “red light” — not for lack of nearly 1,000 hospital beds nor just one person in the state on a ventilator — but for lack of contact tracing. Berkowitz claimed that his contact tracers were so taxed and so vexed that the only way to alert the public after being unable to ID every individual who may have talked to a positive case was to burn 17 businesses and cast a cloud on every other similar operation. The move worked and owners reported their weekend traffic was off dramatically. Which brings us back to the the mayor’s reading assignment: “He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.” Good luck getting people to cooperate with contact tracers now. Anyway, Berkowitz has this authority to do whatever he wants because the absentee Assembly that Anchorage voted for with stamps won’t even rubber stamp his decisions and is too gutless to go on the record either supporting or opposing whatever the heck this lame duck does. That’s what Anchorage voted for, so we get what we deserve. Gov. Standing Tall isn’t coming to pick a fight over Mayor Dad’s overreach or the Assembly’s lack of oversight. That recalls another part of the Declaration about the executive conspiring with a complacent and complicit legislative body: “He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation.” Emergency powers and pulling agenda items without voting gives the mayor more leeway than a rubber duck in the Chena River. Berkowitz has backed off a little bit, with his administration pulling all but three businesses off the list as of July 7 — for now — and stating he doesn’t want to close down the bars and restaurants he just kicked in their sensitive areas. Whether somebody reminded him he wants to collect taxes from Long Island ice teas come Jan. 1 or that he may need some votes from his traditional supporters in Anchorage when he wants to run for governor, the fact he’s giving these businesses a reprieve isn’t exactly worthy of applause. Now to the Act 3 flourish: “In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.” Overcapitalization aside, Jefferson had a point, but I don’t expect Mayor Dad to give me any for the irony when I turn in this homework. Andrew Jensen can be reached at [email protected]

Salary for signatures argued in oil tax initiative lawsuit

Attorneys for resource industry groups argued in Superior Court July 7 that salaries paid to signature gatherers for a ballot measure to raise oil taxes violate state law in a lawsuit that could have big implications for future voter-driven initiatives in Alaska. The monthly payments made to employees of Las Vegas-based Advanced Micro Targeting Inc., which was hired in January by Vote Yes for Alaska’s Fair Share, were in excess of what should be a strict $1 per signature cap spelled out in state law, insisted Matt Singer, an attorney representing a half-dozen industry groups led by the Resource Development Council for Alaska. The business advocacy and trade associations are all members of One Alaska, a campaign coalition organized to fight the Alaska’s Fair Share initiative, which aims to significantly raise production taxes on North Slope oil producers as a means to help close the state’s billion-dollar-plus annual budget deficits. Signature gathering firms are commonly used by initiative sponsors to collect the large number of signatures needed to validate a statewide petition. Vote Yes for Alaska’s Fair Share was required to submit 28,501 signatures, which equals 10 percent of voters in the last general election. At the heart of the suit is a seemingly simple clause in Alaska law that states a petition circulator, or signature gatherer, “may not receive payment or agree to receive payment that is greater than $1 a signature, and a person or an organization may not pay or agree to pay an amount that is greater than $1 a signature, for the collection of signatures on a petition.” “We ask that the court enforce the law as it is written,” Singer said to Superior Court Judge Thomas Matthews during teleconferenced oral arguments. RDC, the Alaska Chamber and others sued Lt. Gov. Kevin Meyer, the Division of Elections, which Meyer oversees, and Vote Yes for Alaska’s Fair Share in April on the grounds that Advanced Micro Targeting paid its employees too much to gather signatures in Alaska and therefore the signatures gathered by the company should have been thrown out by Elections officials. Such a ruling would invalidate 25,865 of the nearly 39,174 signatures submitted by the initiative sponsors and certified by the Division of Elections. In an odd happenstance of legal friends and foes, Alaska’s Fair Share sued Meyer and the Division of Elections last November for what it claimed was an inaccurate and politically slanted ballot summary of the initiative. A Superior Court Judge ruled in favor of Alaska’s Fair Share June 10, ordering the division to correct a sentence in the summary. Gov. Mike Dunleavy’s administration has staunchly opposed changes to oil taxes. RDC, the Alaska Chamber, the Alaska Trucking Association, the Alaska Miners Association, the Alaska Support Industry Alliance and the Associated General Contractors of Alaska who filed the suit contend the initiative would drastically increase taxes on North Slope producers, deterring investment by the industry that drives an outsized portion of Alaska’s economy at a time when oil companies are struggling to adjust to the second sustained oil price collapse in the last five years. In advertisements, Advanced Micro Targeting offered to pay signature gatherers $3,500 to $4,000 per month with an expectation they would collect at least 80 per day, six days per week, according to the group’s complaint, which attorneys for the state and Alaska’s Fair Share did not dispute. Invalidating the signatures would not officially kill the initiative, but it would force Alaska’s Fair Share to gather the signatures again and keep it off the ballot until the next statewide general election in 2022. Longtime oil industry attorney Robin Brena argued for Alaska’s Fair Share that the Legislature wrote the law as it did to limit what he called “bounty hunting” for signatures. “It does not address any other form of payment to circulator,” Brena said of the law. “To state the obvious there is no bounty when petition circulators are paid by salary.” Brena chairs Vote Yes for Alaska’s Fair Share and has been a leader in the push to raise the production tax since the More Alaska Production Act, best known as Senate Bill 21, passed in 2013. The initiative sponsors allege, among other things, that lawmakers are shirking their constitutional duty to receive the maximum possible benefit for the state’s publicly owned resources under SB 21. They estimate the Alaska’s Fair Share Act, which will be on the November ballot as Ballot Measure 1, will raise approximately $1.5 billion in revenue at a time when the state desperately needs it. Advanced Micro Targeting employees were also paid for other work on the campaign, so parsing out how much of their compensation was for what work is impractical, Brena said, while also stressing that the Division of Elections has certified each of the signatures that would be thrown out. He said the lawsuit is a concerted effort by companies that do not want to pay more taxes to disenfranchise initiative signers through potential administrative errors by the Division of Elections. The large North Slope producers are major donors to the trade and business advocacy groups in the state. A motion to dismiss filed by Alaska’s Fair Share highlights that the groups did not raise the issue when Advanced Micro Targeting signature gatherers worked on prior, unrelated initiatives. Assistant Attorney General Margaret Paton-Walsh emphasized that the lieutenant governor does not have subpoena or investigative powers in elections statutes to verify that the affidavits submitted by signature gatherers are accurate. Rather, state law says Elections officials must verify that the affidavits are complete, which is why falsifying an affidavit is a criminal offense of the individual signature gatherer, according to Paton-Walsh. She also noted that state law only gives Elections officials 60 days to certify the validity of the initiative petition. “60 days is not enough time for any kind of investigation into the truth of the circulator affidavits,” Paton-Walsh said. Singer insisted the Legislature intended to rid initiatives of “big money,” noting that leaders of the Recall Dunleavy campaign did not need paid gatherers to collect the first round of signatures needed to remove the governor from office. “If there’s grassroots support for an initiative, signatures can be gathered without any payment,” he said. Brena countered that invalidating the signatures in this case would set a precedent that would make it impractically difficult for citizens to organize an initiative campaign. “The proper remedy (for a false affidavit) is to pursue the criminal matter and not to disenfranchise 40,000 Alaskan voters,” Brena said. “That would be an absurd result.” Judge Matthews said he would make a ruling quickly as the case is likely headed to the Alaska Supreme Court prior to the November election. ^ Elwood Brehmer can be reached at [email protected]

GUEST COMMENTARY: Treat all industries fairly when disclosing COVID-19 cases

On July 3, the Anchorage Health Department released a list of establishments where “persons who were infectious with COVID-19 spent extended time.” Alaska CHARR finds it extremely concerning that to date, the only business types listed are those in the hospitality industry, namely bars and restaurants. It appears as if one industry — arguably that which has been most devastated by this pandemic — is being unfairly targeted, at a time when public exposure is occurring in many other types of establishments, settings, and public gatherings. Additionally, at least one business on the list reported that no advance contact or notice was made before the list was distributed to the public. Alaska CHARR has worked with state and local officials throughout the entirety of the COVID-19 pandemic to ensure that the hospitality industry is part of the solution to ending both the economic and public health crises. Last week, we teamed up with Anchorage business leaders and Anchorage Health Department, or AHD, to develop and release a recommended list of voluntary measures for hospitality members to continue practicing and/or consider implementing in order to help prevent transmission of the virus and a second shutdown of the industry. We are proud to report that many of the thousands of hospitality establishments around Alaska have already voluntarily implemented those procedures that are applicable to their businesses. Hospitality is an integral part of the Anchorage and Alaska economies, and it is vital that our respective government and health officials continue to work proactively and collaboratively with us and other business leaders to develop and promulgate consistent, effective solutions that will protect the health of our people, communities, and businesses. At minimum, the following steps should immediately be taken by the AHD and all applicable local and state government entities: 1. Equal treatment. If a government chooses to release the names of establishments where confirmed public exposure took place, then the names of all businesses where exposure occurred should be released, not just those of a single industry. 2. Immediate notification to business owners. The business owner needs to be directly (when possible) and immediately notified — prior to public release — by the health department when confirmed exposure is reported at an establishment. This gives the business an opportunity to act swiftly and assist the health department before it is inundated with calls from concerned public. 3. Consistent procedures. Procedures for how to handle, notify, and report public exposure in an establishment need to be developed and consistently executed to improve efficiency and provide clear expectations of businesses and the public. 4. More information. Businesses and the public need more information to understand what is being reported to them, including what the numbers associated with businesses mean – what constitutes an instance of “public exposure” and what doesn’t? What are the expectations of the business and the public when confirmed public exposure occurs at an establishment? 5. Support for proactive businesses. Consideration needs to be given to any proactive and reactive measures procedures being followed by each individual business, including adherence to the Alaska Hospitality Promise, enforcement of added mitigation procedures above those in current health mandates, and cooperation with public health officials when cases are reported in their establishments. 6. Additional funding for contact tracing and testing. Funding from the federal CARES Act dollars needs to be used toward additional staff and resources for local and state health departments, specifically for the purposes of conducting contact tracing and improving testing. This should be a top priority for governments. Alaska is different than other states like Texas and Florida who have shut sectors of their industries back down due to their lack of resources for contact tracing; with relatively minimal investment of CARES Act funds, Alaska has the ability to handle this on a case-by-case basis and allow businesses to remain open. “The hospitality industry is certainly willing to do our part – in the interests of economic recovery and public health and safety, many of us have been doing far more than is currently required,” said Alaska CHARR President and CEO Sarah Oates. “Through my daily communications with AHD, I have learned that many of our requests are already in the works, and I hope to see results this week. But it is also important for everyone to remember that this is a community effort. Any time you physically interact with others or enter a public place — not just a bar or restaurant — you are taking a risk. The best way the public can support businesses and your communities is to make safe, responsible, and thoughtful decisions as a patron. Please do your part so that we can remain open to serve you for years to come.” The Alaska Cabaret, Hotel, Restaurant and Retailers Association is a nonprofit corporation, dedicated to serving the needs of the hospitality industry in the state of Alaska since 1964.

Hilcorp picks up on BP’s plan for Prudhoe

The iconic Prudhoe Bay oilfield is now officially in the hands of Hilcorp Energy, the first phase of a $5.6 billion deal to buy BP out of Alaska. As expected, the companies announced the operator transition at Prudhoe Bay July 1. The upstream portion of the deal also includes BP’s roughly one-third stake in the Point Thomson gas field operated by ExxonMobil as well as the London-based major’s half share of Milne Point, which is already run by Houston-based Hilcorp. However, Hilcorp Alaska leaders have said Prudhoe Bay was the real prize of the deal. “We look forward to continuing to drive economic growth, create Alaskan jobs and contribute to local economies for decades to come. Hilcorp is committed to safely and responsibly developing Alaska’s natural resources,” Hilcorp CEO Greg Lalicker said in a prepared statement. The companies expect to close on the midstream portion of the deal, which includes BP’s 48 percent share in the Trans-Alaska Pipeline System, later this summer. It is under review by the Regulatory Commission of Alaska. According to Hilcorp, the company has almost tripled its Alaska workforce from about 550 employees pre-deal to about 1,450 workers, with more hires likely. State regulators in the Division of Oil and Gas expect Hilcorp will work off of BP’s plan of development — the annual state-approved work plan — for Prudhoe Bay, according to spokesman Sean Clifton. Oil and Gas Director Tom Stokes approved BP’s 2020 Prudhoe Bay POD, which covers July 1 to June 30, 2021, on May 13, so the work planned by BP will be conducted by Hilcorp. A Hilcorp spokesman declined to comment on the Prudhoe Bay plan of development, or POD, but Clifton wrote via email that Hilcorp had representatives that participated in the POD process both for Prudhoe Bay and its satellite fields, so Oil and Gas officials do not anticipate Hilcorp filing an amended POD for Prudhoe, at least in the near term. The 2020 POD outlines plans to conduct more than 300 production-adding well work jobs and another 500 non-rate adding well jobs across the 254,000-acre field. BP conducted similar levels of well work in 2019, according to the POD. Work by Hilcorp in the next 12 months is also expected to include drilling between four and seven new rotary wells across the field and another 15 to 20 coil tubing well sidetracks. Those targets are mostly spread across the eastern and central portions of the field, according to a map submitted by BP. BP produced an average of 165,000 barrels of oil per day from Prudhoe in 2019, down from 174,200 per day in 2018. BP estimated 2020 production to fall somewhere between flat and an 11 percent decline to 147,000 barrels of oil per day. Another 43,000 barrels per day of natural gas liquids were produced from Prudhoe last year; liquids production is forecasted to generally remain flat in 2020. BP also conducted five well workovers in the 2019 period, which Hilcorp is likely to increase to six to nine over the next year. The workover activity will focus on returning injector and producer wells that were shut-in due to wellbore integrity issues to service, according to the POD. The document also calls for merging data from a 2015 seismic survey of North Prudhoe Bay with the field-wide 3D seismic shoot BP conducted last year. Stokes acknowledged in the May 13 approval letter to BP that some of the work in the plan may have to be deferred because of the coronavirus pandemic. “The Division therefore assures BP of its support regarding any plan changes necessary to protect the health, safety and welfare of operations personnel, the physical and economic integrity of the facilities and preservation of the surrounding environment,” Stokes wrote. ConocoPhillips, the other primary North Slope producer, cut its 2020 drilling program short earlier this year. Late-winter exploration drilling was ended early to protect the health of workers at remote drill sites while development drilling was also stopped in response to the oil price collapse that saw the price for Alaska North Slope crude briefly go negative in April. Elwood Brehmer can be reached at [email protected]

Salmon fishing off to a slow start statewide

Salmon harvests statewide are slow so far as the fisheries head toward their usual high points in July. So far, fishermen have landed about 5.8 million salmon. That’s less than half of the 2018 numbers by the same date, when 14 million had been landed. Much of that is due to poor sockeye returns, particularly in the Copper River area, though everywhere is slower than previous years, including Bristol Bay. The Copper River and Bering River districts continue their shutdown this week due to unexpectedly low sockeye returns. The return to the Copper River is not living up to the preseason forecast, with only 378,058 sockeye through the Miles Lake weir as of June 29, compared to more than 696,828 by the same date last year. The forecast called for 1.5 million sockeye to return to the Copper River this year. In an emergency order issued June 27, the Alaska Department of Fish and Game noted that the escapement through June 25 is about 85,000 fish behind projections, and the surveys of the Copper River Delta are significantly behind estimated ranges. “[Through June 25], the sonar count is the 14th lowest on record (1978-2020),” the emergency order states. “Cumulative commercial harvest this year is the fourth lowest harvest to-date in the last 50 years. “ As of June 27, fishermen across Prince William Sound had harvested about 495,000 sockeye, less than half of the 2019 number of about 1.1 million. Chum salmon harvests are down about 44 percent as well, and king salmon harvests are down about 75 percent, according to a harvest update from the McDowell Group. Fishermen in the Copper River district have harvested 81,228 sockeye, according to the Alaska Department of Fish and Game. Pink salmon have yet to show up in the Sound in large numbers. Bristol Bay is also somewhat behind, though there’s still time for the harvest to pick up. Last year was another banner one for the Bay, and 2020 is forecast to be more modest—around 34.6 million available for harvest with a total run of 46.6 million, according to ADFG. But even for that prediction, harvest is pretty slow; only about 1.5 million sockeye have been harvested, about 78 percent less than last year. Andy Wink, the executive director of the Bristol Bay Regional Seafood Development Association, noted that other seasons that ended up having exceptionally large harvests started slowly as well. “We also had a slow start in 2012, 2015 and 2016; those last two ended up producing over 35 million sockeye harvested in the Bay,” he said. “We’re between 10 and 15 percent of our way through the normal harvest curve. There’s still plenty of time to catch up.” One of the major pressures on the Bay has been concern about COVID-19 infections, both spreading in vulnerable communities and in processors, where they could bring the fishery to a swift halt. Last week, a dozen seafood workers in Dillingham tested positive, though they were quarantined and not spreading it in the community. Overall, there were 19 nonresident cases in the combined Bristol Bay and Lake and Peninsula boroughs, according to the Alaska Department of Health and Social Services. By contrast, there were only two resident cases in the combined Bristol Bay and Lake and Peninsula boroughs. Wink said the protocols the industry has set up to prevent the spread of the virus seem to be working. “We haven’t seen really any community spread thus far in the Bay, and that’s really encouraging. A lot of the fishermen and processing workers came in in early June. I think one of the concerns was were we going to see transmission of the virus when they were in the plane, in the boatyards … by this time, we would have seen that if that had happened,” he said. “So far so good. We’re not out of the woods yet, but I think all of the precautionary measures and all of the work that went into setting up the season are working.” Commercial fishing is mandated as an essential industry, with long lists of protocols for how fleets and processors should work this year and prevent the spread of the virus. Of the 64 nonresident cases identified last week, 43 were in seafood workers. All of them were quarantined prior to testing positive, according to the DHSS. Upper Cook Inlet’s fishermen are off to a slow start as well, with 61,904 salmon landed so far. About 59,000 of them are sockeye. That’s down about 73 percent from last year, according to the McDowell Group. The Kenai subdistrict setnetters have yet to come online, but they’ll be restricted based on the prohibition of bait in the Kenai River late-run king salmon fishery as well. The Kasilof River is tracking ahead of last year, with 79,292 fish passing the sonar as of Monday, according to Fish and Game. The Kenai River sonar went online July 1. The sockeye being caught in the Kenai mainstem so far are largely Russian River sockeye, which are headed upstream to spawn near Cooper Landing. That sportfishery opened mid-June with additional area: Fish and Game opened the sanctuary area near the confluence of the two rivers early. The sanctuary doesn’t usually open until the late run or if the run is particularly large. Upper Cook Inlet sportfish area management biologist Colton Lipka said opening up that area spaced out the anglers more along the fishery. “This year, we saw what we needed to see, and I think it served everybody’s interest to spread out a little more up there,” he said. “This is a fairly new tool that we have since we have a few more years of data.” The weir at Lower Russian Lake has counted 13,655 sockeye so far, a fraction of what it counted last year on the same date. However, that 13,655 is about 8,400 fish lower than the lower end of the escapement goal for the early run, and there are still two weeks left before it transitions to the late run. Last year was an anomalously huge run, Lipka said. They ended up with nearly 126,000 sockeye on the early run, about triple the upper end of the escapement goal. “If we actually look at the average early run escapement, last 10 years, it’s 40,000,” he said. “Last year’s was 125,000. The next biggest year behind 2019 was back in 2002, and that was 85,000. Last year was a true exception. It’s awesome to see those years; what we’re looking at this year was a little more back towards normal. It does seem like the run is a little more spread out.” Effort on the Russian so far has been reportedly good on weekends but light on week days compared to a normal year, meaning it’s mostly residents using their weekends to fish as opposed to the normal load of tourists. Lipka cautioned anglers that there have been reports of brown bear activity on the road side of the river this year and that anglers should keep their gear and fish close. Elizabeth Earl can be reached at [email protected]

Parties skeptical of ranked-choice voting intiative

This fall Alaskans will have the chance to overhaul the voting process for statewide elections with an initiative longtime Alaska officials in traditional two-party politics are dead-set against. Leaders of the Vote Yes on 2 for Better Elections campaign insist their initiative would put an end to “dark money” in statewide elections by stiffening disclosure requirements for third-party political groups, encourage voter turnout in primary elections and ensure winning candidates are supported by a majority of voters, among other benefits. Better Elections Campaign Manager Shea Siegert said during a June 30 House State Affairs hearing that current state campaign finance laws do not require third-party groups supporting a candidate or cause, commonly referred to as independent expenditure groups, to disclose the ultimate source of their funding. That leaves voters without enough information about who is attempting to influence Alaska’s elections, according to Siegert. The initiative would require all independent expenditure groups to report the primary source of contributions of more than $2,000, but it would not prohibit them, as they are protected under the First Amendment, he noted. “What we’re trying to do is shine a light on that true source,” Siegert said. The Alaskans for Better Elections initiative will be proposed as Ballot Measure 2 on the November general election ballot. It would also shift Alaska to an open primary system allowing voters of any political affiliation to vote in any primary election. Currently, Alaska law allows parties to choose how they conduct their primaries; Republican primaries are open to party members and non-partisans while the other parties have open elections. Alaska had a blanket primary system — which allows voters to support candidates from different parties in different races — until 2000, when it was ruled unconstitutional by the U.S. Supreme Court. Open primaries generally permit all voters to pick which party they want to vote for but can limit voting to a single party. The top four vote-getters in the primary, regardless of party, would move on to the general election under the initiative. According to Better Elections attorney Scott Kendall, other states that have gone to open primaries have seen turnout increase by 50 percent or more. “The great thing about increased primary turnout is those primary voters almost universally become general election voters,” Kendall said. Open primaries demand more compromise from candidates on big issues because the voter base is broader, he contends. In a closed or semi-closed primary, “5 percent of the electorate can punish (candidates) for something the rest of the district wants,” Kendall said. Finally, Alaska’s general election would shift to a ranked-choice system in which voters would rank the candidates 1-4. The candidate receiving the fewest first choice votes would be eliminated and the process would continue until one candidate gets more than 50 percent of the votes in what amounts to an automatic runoff election. Voters who favored the first candidate eliminated would have their vote moved to their second choice candidate, according to Kendall. Additionally, voters who wanted to vote for only one candidate could simply vote for just their first choice, he said. Maine voters passed ranked-choice voting in 2016 — the first state to do so — and 99 percent of voters filled out their ballot correctly in the first ranked-choice election, according to Siegert. He said the open primary and ranked choice systems mostly benefit the 62 percent of Alaskans who are not registered with one of the two major parties by adding more competition into state politics. He said nationally the major parties generally favor ranked-choice voting. “In essence, it’s the return of free market voting to Alaska,” he said in an interview. Kendall argued that ranked-choice voting discourages partisan legislative redistricting, or gerrymandering, that can arise when voters’ choices are limited by a two-party system. “In our system where they will have four choices and can rank those choices it becomes a zero sum game to begin to push votes around the map,” he said. Former Anchorage Democrat legislator and one-time Alaska Democratic Party executive director Kay Brown said she believes the election reforms run afoul of the Alaska Constitution in several fronts, including a requirement that a party’s governor and lieutenant governor candidates must run as a team in primary elections. Brown said she respects the goal of bringing more openness and transparency to campaigns but called the 25-page initiative “complicated, confusing, poorly explained and legally flawed.” “Alaska’s election system is not perfect but I do not believe it is broken,” Brown said. “If anything is broken it’s the initiative process.” Kendall noted that state attorneys and the Division of Elections challenged the initiative because they believed it violated the Alaska Constitution’s single-subject rule for initiative bills but they did not raise other perceived constitutional conflicts. The Alaska Supreme Court upheld the initiative in a unanimous June 12 ruling. Alaska Democratic Party spokeswoman Jeanne Devon declined to comment when asked about the party’s official position on the Better Elections initiative. Alaska Republican Party Chairman Glenn Clary concurred with Brown’s sentiments, but further argued in an interview that the initiative is part of an attempt by Better Elections’ Outside funders to control Alaska politics. “What they’re wanting to do is socialize Alaska. They’re trying to eliminate identity to any party,” Clary said. “That’s socialism.” Better Elections’ principal backer is Unite America, which bills itself as an independent group attempting to lessen partisanship in the country’s politics through advocating for ranked-choice voting and open primaries. Through the first quarter of the year Better Elections had raised more than $1.1 million for the initiative campaign, with $965,000 of that coming from Unite America, according to Alaska Public Office Commission filings. Alaska is being used as a test lab because of its small population for the policies an elite few want to enact nationwide, according to Clary. “If you believe in certain tenants and label yourself as such, then you’re not welcome in this state under Better Elections,” he said. While parties would lose control of who can vote in their primaries, candidates would still be able to have their political affiliation shown on the ballot with the traditional “D” or “R” or “I” or something else, according to campaign leaders. Clary said he would expect the Alaska Republican Party to seek a convention-style primary system if the initiative passes. Elwood Brehmer can be reached at [email protected]

Movers and Shakers for July 5

The Chugach Electric Association board of directors elected new officers June 17, including re-electing Bettina Chastain as chair. The complete slate of officers includes: Chastain, chair; Rachel Morse, vice chair; Jim Henderson, secretary; Harold Hollis, treasurer. Attorney Sam Cason and engineer/consultant Mark Wiggin were elected to the two open seats on the board. Dr. Karen Carey was appointed to serve as interim chancellor for University of Alaska Southeast, effective July 1, succeeding outgoing UAS Chancellor Rick Caulfield. Carey currently serves at the UAS provost. Carey joined the University of Alaska Southeast as provost in 2016. She earned her Ph.D. in school psychology from University of Cincinnati, and came to UAS from the California State University Channel Islands, in Ventura, where she served as the dean of Arts &Sciences. Kyle Kirn was promoted to audit manager at the Anchorage office of KPMG LLP. Kirn brings five years of accounting experience with a variety of organizations, including Alaska Native corporations, construction, renewable energy and fishing. Kirn earned both his master and bachelor degrees in accounting from Brigham Young University. Lucas Smith was promoted to audit manager. Smith brings five years of accounting experience and works with both public and private companies throughout the Pacific Northwest. He has extensive experience in the railroad, mining, and consumer products industries. Smith earned both his master and bachelor degrees from Montana State University. Debra Pellati, CFP, CTFA, has joined the Key Private Bank Oregon and Alaska team as senior client experience manager. With more than 22 years in the financial services industry, Pellati most recently worked as a financial planner with a regional planning firm. She has achieved extensive success as a trust investment advisor with a national financial services firm, as well as several international banking and investment organizations. She served as a KeyBank branch manager in Portland, Ore., in 2014. Pellati holds an MBA from International College of Cayman Islands/University of Tampa; a graduate diploma in business, finance and financial management services from Lakehead University; and a certificate in adult education from the University of Manitoba. She also has several professional certifications, including her Series 6 and 66 licenses.

FISH FACTOR: Decision day approaches for Pebble mine review

The biggest red salmon run in the world is building at Bristol Bay. Up to 50 million fish could surge into its eight river systems in coming weeks, on par with past seasons. When it’s all done, the fishery will provide nearly half the global supply of wild sockeye salmon. But this summer is different. Not only due to the restrictions and fears and economic chaos caused by Covid-19. At the height of the fishery, fishermen will learn if a massive gold and copper mine that’s been hanging over their heads for two decades gets a greenlight from the federal government. In mid-July, the U.S. Army Corps of Engineers will unveil its federal “record of decision” on the permit application by Northern Dynasty of Vancouver, Canada, to build the Pebble mine at the sprawling mosaic of headwaters that provide the spawning and rearing grounds for the region’s salmon. Three decisions are possible for the mine: issue a permit, issue a permit with conditions, or deny the application. “As Bristol Bay’s fishermen head out to the fishing grounds for the next six weeks, we are counting on Congress to protect the 14,500 workers directly employed by the commercial salmon fishery,” said Andy Wink, director of the Bristol Bay Regional Seafood Development Association. “Pebble mine is a threat to Alaskan jobs, America’s food security, and a salmon resource unparalleled anywhere on the planet.” “The EPA’s own science shows that this project poses an unacceptable risk to our country’s greatest remaining wild salmon runs,” said Katherine Carscallen, director of Commercial Fishermen for Bristol Bay. “We look to Alaska’s senators for their leadership and implore the EPA to use its authority under the Clean Water Act to veto Pebble’s permit.” Such calls for help will likely go unheard. Alaska’s two Republican senators and lone congressman have staunchly stood behind the Pebble project’s right to go through a rigorous and fair permitting process and have been tightlipped about their opinions in the meantime. Now that the process is pretty much a wrap, will they finally tell Alaskans if they are “for or agin’ it?” “Congressman Young remains committed to seeing the process fully completed, but without a finished report, there is nothing that can be commented on,” responded press secretary Zack Brown. “The federal permitting process is ongoing, and until there is a decision document to review there is nothing on which to provide comment,” said Mike Anderson, Communications Director for Sen. Dan Sullivan. Sen. Lisa Murkowski’s office did not respond but she would likely express “concern.” Every survey and poll ever done has shown that a huge majority of Alaskans from all regions oppose the Pebble mine. But equivocating with constituents is the way of today’s politicians. Former Sen. Ted Stevens in 2008 stated emphatically and often: “I’m not opposed to mining, but Pebble is the wrong mine in the wrong place.” Love him or not, you always knew Uncle Ted’s stance on anything you asked him in his 40-year tenure in the U.S. Senate. Alaska’s current reps in Congress might not dare come clean about Pebble, but investors are wiping their hands of the project. Global investment banking firm Morgan Stanley, once the fourth largest institutional shareholder in Northern Dynasty, on March 31 sold 99.14 percent in its shareholdings in the project, reported the National Resources Defense Council and CNN Money. “While the reasons for Morgan Stanley’s recent sell-off are unknown, the global investment company is known as a strong proponent of the principle that environmental and social responsibility are essential to long-term investment success,” the NRDC said. That sell-off is just the latest of Pebble put-downs on a global scale. In 2011, Mitsubishi Corp. sold out. In 2013, Anglo American abandoned its partnership, walking away from a nearly $600 million investment. In 2014, Rio Tinto donated its shares to two Alaskan non-profits: Alaska Community Foundation and the Bristol Bay Native Corp. Education Foundation. In 2018, First Quantum Minerals walked away after five months from a $37.5 million investment and option for a 50 percent partnership. Also in 2018, BlackRock zeroed out its shareholdings. New York investment firm Kerrisdale Capital Management called Northern Dynasty’s plans “worthless,” “a value-destroying boondoggle,” “doomed,” “politically-impaired” and “commercially futile.” “The cash-strapped 100 percent owner’s desperate hope—its “business plan”—is that the issuance of a permit by the Army Corps will attract new investment, a new partner, or a buy-out,” the NRDC said. Despite its claims of a “smaller footprint” for Pebble, Northern Dynasty states on its website that its “principal asset, owned through its wholly owned Alaska-based U.S. subsidiary, Pebble Limited Partnership, is a 100 percent interest in a contiguous block of 2,402 mineral claims in southwest Alaska, including the Pebble deposit.” Every landslide begins with a single Pebble… Building a mine like Pebble (or Donlin) can be compared to building a new Alaska city. The “Pebble deposit” lies within a 417-square-mile claim block and will include an open pit, a 550 foot high tailings dam to hold roughly 30 billion cubic feet of mining wastes forever, overburden stockpiles, quarry sites, water management ponds, milling and processing facilities, a 188-mile natural gas pipeline from the Kenai Peninsula to the site, a power plant, water treatment plants, camp and storage facilities, and an 83-mile road along Lake Iliamna to haul the gold and copper to Diamond Point in Cook Inlet for shipment. (Based on a new “northern route” plan that Pebble opted for a few weeks ago.) The EPA said in a May 28 letter, “the discharges of dredged or fill material…may well contribute to the permanent loss of 2,292 acres of wetlands and other waters is anticipated, including 105.4 miles of streams, along with secondary impacts to 1,647 acres of wetlands and other waters, including 80.3 miles of streams, associated with fugitive dust deposition, dewatering, and fragmentation of aquatic habitats.” The tools of the mining trade - hundreds of huge, diesel-fueled bulldozers, blasters, crushers, trucks and other heavy equipment – kick up a lot of dust. The Army Corps says Pebble will generate nearly 16,000 tons of “fugitive dust” during mining and transports. When it’s blowing in the wind, the dust will carry copper and other particles to thousands of acres of wetlands and streams. “Increases in copper concentrations of just 2-20 parts per billion, equivalent to two drops of water in an Olympic-sized swimming pool, have been shown to impact the critical sense of smell to salmon which they use to avoid predators and to locate the stream in which they were spawned,” said Thomas Quinn, aquatic and fishery science professor at the University of Washington. In 2014, the Environmental Protection Agency ruled that a large scale mine like Pebble would be “devastating” to the world’s biggest salmon run and to the region’s culture, and special protections were provided under the Clean Water Act. The Trump Administration abruptly removed the protections in 2017, saying the move “pre-empted the permitting process.” It also got a big push from Gov. Mike Dunleavy who has made no secrets about his support for Pebble. Alaska’s Senators and Congressman supported Trump’s move. But D.C. can now step aside. The state of Alaska will make the final decision on the mine. The Pebble applicants do not own the surface rights associated with the mineral claims and all the lands are owned by the state. Notably, the claim(s) lies within the 36,000 square-mile Bristol Bay Fisheries Reserve, created by voter initiative (70 percent) in 1972 as a way to safeguard salmon from large scale oil, gas and mining projects. State law requires that the final say on permitting Pebble falls to the Alaska Legislature. Fish on! The competitions’ Take Dr. Al Gross, candidate for U.S. Senate running against Sen. Dan Sullivan: “I know the developers have scaled back the scope of the mine to try to reduce the impact, but that doesn’t change the fact that it’s still at the headwaters of one of the world’s most important salmon runs. And I’m worried that if they start small, that at some point in the near future they’ll push to expand it. Nothing is going to change the fact that this is the wrong mine, wrong place, and even a small risk to this state and national treasure is too much.” Alyse Galvin, candidate for U.S. House running against Rep. Don Young: “Alaska is a natural resource state and mining is a key part of our economy, however, so are our fisheries. I am opposed to the Pebble Mine Project because it is the wrong mine in the wrong location and represents too big a risk to Bristol Bay, the greatest salmon fishery in the world. We need Alaska’s representatives in Washington to once again be full-throated champions of Alaska’s fisheries.” Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

GUEST COMMENTARY: Don’t let China take over another vital industry

There is growing congressional interest in finally confronting China over its predatory trade practices. But while talk continues in Washington over the right policy response, China keeps picking off key parts of U.S. manufacturing, including the automotive industry. A recent Senate hearing made clear just how serious the situation has become. China is now positioned as the dominant player in the lithium-ion battery supply chain for electric vehicles, or EVs. In fact, China is so outpacing America in battery development that one witness described the U.S. as being “lapped.” Simon Moores, the managing director at Benchmark Mineral Intelligence, a consultancy focused on the battery supply chain, told the Senate Committee on Energy and Natural Resources that China has 107 battery mega-factories either operating or in the pipeline. In contrast, the U.S. has only nine, with just three currently active. Moores said that China is now bringing the equivalent of one battery mega-factory online each week. One bright spot in the U.S. has been the emergence of Tesla. But China is still far outpacing the U.S. in deployment of EVs and charging stations as well as the development of supply chains for minerals and metals needed to build EVs and batteries. By focusing on EVs and the battery supply chain, China is aiming to dominate 21st Century automotive production. We’ve seen this playbook before. Beijing overtakes an essential industry by trading profit for market share and control. For example, thanks to massive subsidies for state-controlled companies, China now produces more than half of the world’s steel. And it has even tighter control over the vital minerals and metals used to produce everything from smart phones and fighter jets to lithium-ion batteries. In fact, of the 35 minerals deemed critical to America’s economic and national security, China is the dominant supplier for 23. The U.S. cannot afford to lose the EV arms race. We should not allow assembly lines to close, and put hundreds of thousands of good-paying jobs at risk, all to benefit the false “efficiency” of offshoring. The United States must not allow more industries to be gutted and relocated overseas. And Washington should not allow China to gain even greater leverage over our economy and national security. What we need to do is to push back against China’s industrial predation, subpar environmental practices, and systemic labor abuse. We need a recommitment to industrial policies that place a premium on secure domestic supply chains, resources, and workers. Now is the moment to turn the tide to ensure industries start coming home as we rebuild the vital supply chains and manufacturing capacity that can underpin future prosperity and economic security. ^ Michael Stumo is CEO of the Coalition for a Prosperous America. Follow him on Twitter @michael_stumo.

Revised BLM plan opens 80% of NPR-A to development

Interior Department officials released an aggressive plan to open millions more acres on the North Slope to oil and gas leasing June 25, the latest effort in the Trump administration’s ongoing push to encourage more energy development in Alaska. The Bureau of Land Management intends to make 18.7 million acres of the 23 million-acre National Petroleum Reserve-Alaska on the western North Slope available for leasing under the agency’s preferred alternative in the final environmental impact statement for the NPR-A Integrated Activity Plan. The new plan would add 6.9 million acres to the area open for leasing, or about 100,000 acres more than was evaluated under the most liberal leasing option discussed in the draft NPR-A land-use EIS released last November. Currently, about 11.8 million acres, or a little more than half of the reserve, is available for leasing by industry under the NPR-A plan finalized by the Obama administration in 2013. The existing NPR-A Integrated Activity Plan has been roundly criticized by development proponents for restricting industry access to large swaths of highly prospective oil acreage, some of which are currently deemed to be critical habitat for caribou and waterfowl populations that are important subsistence food sources for nearby village residents. Interior Secretary David Bernhardt said in a formal statement the revised NPR-A plan is another significant step towards making good on President Donald Trump’s promise to increase access “to our nation’s great energy potential.” BLM is also leading the environmental impact statement review for the highly contentious Arctic National Wildlife Refuge coastal plain oil and gas leasing plan. BLM Alaska Director Chad Padgett said agency officials worked to open more land to industry while using various management tools to protect wildlife habitat and subsistence activities. “The BLM worked with state, local, Tribal and private sector stakeholders to propose management prescriptions that achieve a balance between conservation stewardship, being a good neighbor, and responsibly developing our natural resources to boost local and national economies,” Padgett said. The plan would open the entire Teshekpuk Lake Special Area in the northeast portion of the reserve — an area of particular importance to both industry for its oil potential and conservation and subsistence interests for its waterfowl and caribou rearing habitat — to leasing. Impacts to caribou calving areas and bird habitat would be “partially mitigated through no surface occupancy stipulations and timing limitations,” the final EIS states. Other, more conservative leasing options considered by BLM would prohibit leasing around Teshekpuk Lake but would allow for a pipeline corridor through the area to support nearby development. The plan would eliminate the Colville River Special Area, which provides habitat protections over 2.4 million acres adjacent to the river as well. The Colville River makes up much of the eastern boundary of the NPR-A. BLM’s preferred alternative also would not add any of the 12 rivers in the reserve suitable for a National Wild and Scenic Rivers System designation to the conservation network, according to the EIS. Instead, “BLM would manage the existing 12 suitable rivers to protect their free flow, water quality, and outstanding remarkable values,” the document states. Gov. Mike Dunleavy and the members of Alaska’s congressional delegation all commended BLM officials on the new plan to drastically increase the area open to industry in formal statements. State officials under both former Gov. Bill Walker and the Dunleavy administration have pushed Interior to revise the 2013 NPR-A plan and the state is also looking at ways to link several communities in the reserve with year-round road connections. In December 2017, the U.S. Geological Survey issued a resource assessment for the NPR-A in which the agency concluded the reserve and nearby state lands could hold some 8.7 billion barrels of technically recoverable, undiscovered oil, primarily based on the recent Nanushuk discoveries in the area. A 2010 NPR-A assessment projected a mean resource estimate for the reserve of just 896 million barrels. The vast majority of the acreage currently under lease is held by ConocoPhillips, which is in the environmental permitting process for its large Willow oil prospect in the northeast portion of the reserve and is also working on smaller projects in the area. Expected to cost between $4 billion to $6 billion to fully build out, the Willow project could produce upwards of 100,000 barrels of oil per day at its peak, according to the company. Former Interior Secretary Ryan Zinke first directed department agencies to reevaluate the reserve’s oil and gas potential as well as changes to the management plan in May 2017. BLM officials expect the new plan could help spur oil production of up to 500,000 barrels per day over the next 20 years with up to 250 miles of new roads and approximately 20 new drilling pads in the reserve under a “high development scenario,” according to the agency’s analysis. Medium development is envisioned as peak production of 210,000 barrels per day, 160 miles of new roads and 10 satellite drilling pads. Low long-term development would generally be limited ConocoPhillips’ existing work at Willow and its other, smaller Greater Mooses Tooth projects farther south in the reserve along its eastern boundary with state land, BLM estimates. The agency will finalize the NPR-A plan with a record of decision at least 30 days following the release of the final EIS, in accordance with the National Environmental Policy Act. ^ Elwood Brehmer can be reached at [email protected]

AK LNG economics still challenged at lower cost

An updated cost estimate for the state-led Alaska LNG Project has trimmed about $5 billion from the construction price tag, down to $38.7 billion. Though the new estimate, released at the Alaska Gasline Development Corp.’s June 25 board meeting, is 12 percent less than the number of several years ago, it’s still significantly higher per tonne of output capacity than most other proposed LNG developments around the world. At $1,900 per tonne for the project’s designed capacity of 20 million tonnes per year, the cost is higher than Qatar’s expansion plans to add almost 50 million tonnes per year to its world-leading output (at $1,000 per tonne), Russia’s Arctic LNG projects (around $1,100 a tonne, with substantial government assistance), expansion of Papua New Guinea’s capacity (under $1,500), or either of three LNG export projects in the works for Mozambique ($1,500 to $2,000). In addition, building a North Slope gas treatment plant, an 807-mile pipeline through the state, and a liquefaction plant and marine facilities at Nikiski would be substantially more expensive per tonne of output than any of the export terminals in operation, under construction or proposed for the U.S. Gulf Coast, generally running $500 to $1,000 per tonne. The cost depends whether the export terminal is an add-on to an underused LNG import facility, expansion of an existing liquefaction and export terminal, or a greenfield project. Capital costs, along with price of feed gas, operating expenses and shipping, drive the economics of LNG export ventures in a highly competitive global market. Some of the LNG projects built over the past decade have come in higher than Alaska’s latest cost estimate, such as the Ichthys project, a gas field offshore Australia that sends its production through a 553-mile subsea pipeline to an onshore LNG plant. Delays and cost overruns drove the cost per tonne to more than $2,000 by the time the first cargo left the dock in 2018. But a significant economic salvation for the Japanese-led project is that at peak production, Ichthys will produce 150,000 barrels a day of high-value condensate and liquid petroleum gas (butane and propane) from the field. The flow from Alaska’s Prudhoe Bay field, which would feed three-quarters of the gas for the project’s initial supply, would be dry gas, as most of the rich liquids have been stripped out and shipped down the Trans-Alaska Pipeline System over the decades, adding to producer and state revenues. Where Alaska has a cost advantage over several other LNG suppliers is its shorter shipping distance to North Asia markets. It’s about 5,000 sea miles from Nikiski to Tianjin, China, the country’s busiest import terminal this year, versus 6,500 miles from Qatar, about 7,300 miles from Mozambique, and 10,000 miles with a Panama Canal crossing from the U.S. Gulf Coast. The state-owned Alaska Gasline Development Corp., which has been leading the development since North Slope oil and gas producers ExxonMobil, BP and ConocoPhillips cited weak economics in withdrawing as participants in late 2016, has worked the past 14 months with contractor Fluor Corp., and with help from BP and ExxonMobil, to refine its plans toward reducing construction costs. Texas-based Fluor is experienced in LNG plant construction. It’s part of a joint venture that was awarded the engineering, fabrication and construction contract for the $30 billion (U.S.) Shell-led LNG Canada project under construction in Kitimat, British Columbia, about 100 miles southeast of Alaska’s southern border with Canada. The Kitimat project is estimated to cost just more than $2,000 per tonne for its first phase, with tentative plans for a lower-cost expansion that would improve the project’s overall economics. The development includes a 416-mile pipeline to deliver gas from producing fields in the far northeastern corner of British Columbia. The Alaska LNG cost estimate does not include the additional expense of building out gas production at Point Thomson, which would feed about one-quarter of the project’s initial gas supply. The field operator, ExxonMobil, has not publicly disclosed the development costs for expanding Point Thomson beyond its current capacity of up to 10,000 barrels a day of condensate while reinjecting the gas into the reservoir. Designing and building multibillion-dollar LNG projects can be a risky business for contractors. McDermott International, which built the Cameron LNG project in Louisiana for a Sempra-led venture, filed for bankruptcy protection in January. Its financial struggles included cost overruns and delays at Cameron, which shipped its first cargo last year. Houston-based KBR, with contracts in hand to build proposed LNG terminals in Texas, Louisiana and Nova Scotia, announced June 22 it will exit most of its LNG construction business, focusing instead on the financially safer work of government contracting. It will “no longer engage in lump-sum … construction services,” KBR said, adding that the COVID-19 pandemic accelerated its decision to leave fixed-contract energy projects. Looking to get the state out of the role of project leader for the cost-challenged Alaska project, the AGDC board at its April meeting adopted a strategic plan that calls for finding a private developer or team of developers to take over from the state as lead on the venture. The board of directors “does not support” the state continuing as the sole project sponsor past Dec. 31. LNG in Asia has been selling at record lows of less than $2 per million Btu on the spot market this spring and early summer, about one-third the peak of last winter and far below the cost of gas supply and transport for U.S. Gulf Coast LNG to make any money. Those prices would have to more than triple to cover the cost of LNG from Alaska. And though prices in Asia were close to that level at their high point last winter, improved prices would help every other proposed LNG development worldwide, not just Alaska. Additional supplies from projects on the Gulf Coast and Australia, along with weakened demand due to the worldwide coronavirus-induced economic slowdown, have left the market awash in too much gas, with analysts speculating when demand might return and when new supplies might be needed. If the state corporation cannot find someone interested in taking over the venture, it would “put the Alaska LNG project assets up for sale” in a formal bidding process, according to the staff presentation at the April 9 board meeting. AGDC staff told the board at the June 25 meeting that the cost savings under the updated estimate came from lower market prices for equipment, better strategies for contracting, more efficient liquefaction technology and reduced risks that allow a smaller contingency. Staff also told the board that if the old $44 billion estimate were adjusted for inflation to match the 2019 dollars of the new $38.7 billion projection, the comparable savings would be slightly more than $8 billion. Staff further explained to the board June 25 that additional cost savings in annual operating expenses could be achieved by reducing the project’s payments to cities and boroughs promised in lieu of property taxes. Federal loan guarantees could lower the cost of borrowing money to build the project, staff said, though congressional approval would be required if the intent is to amend a 2004 law that provided such guarantees only for an Alaska project that delivered gas to the Lower 48 states. While confronting the economic realities of Alaska’s decades-long dream for a North Slope natural gas project, AGDC also faces two challenges to its federal authorization for the LNG project. The Matanuska-Susitna Borough on June 19 filed a request for a rehearing with the Federal Energy Regulatory Commission, which approved the Alaska project on June 6. The borough has spent the past several years advocating that its property at Port MacKenzie, across Knik Arm from Anchorage, is a better site for the LNG plant than Nikiski, about 60 air miles to the southwest on the Kenai Peninsula. The Matanuska-Susitna Borough has asked FERC to rehear its action and order a supplemental environmental impact statement to correct alleged errors in the review that unfairly handicapped consideration of Port MacKenzie. The project team selected Nikiski in 2013, a decision which the borough has criticized as based on bad information. Three days after the Mat-Su filing, the Center for Biological Diversity and Earthjustice filed a 142-page request for a rehearing, alleging “FERC approved the project without properly considering whether it is in the public interest and without properly examining its numerous harmful environmental impacts.” The environmental groups filed the request on behalf of the Sierra Club, the Northern Alaska Environmental Center, and the Chickaloon Village Traditional Council. Among the issues cited in the filing, the groups criticized FERC for not considering the project’s impacts on North Slope gas production and the greenhouse gas emissions from increased production and consumption of natural gas. The environmental groups and the Matanuska-Susitna Borough are official intervenors in the FERC docket, and only intervenors can request a rehearing and, if unsuccessful, take the matter to federal court. Under FERC regulations, if the commission fails to respond to a request for a rehearing within 30 days, the request is denied. Larry Persily is a former Alaska journalist, state and federal official who has long tracked oil and gas markets and projects worldwide. He can be reached at [email protected]

OPINION: Karen vs. Karen

Whether you are pro-mask or anti-mask, I really can’t stand you right now. The online crusade of keyboard Karens on both sides of the dumbest debate since tastes great versus less filling is doing real damage to business owners caught in the crossfire of a battle they didn’t choose and are desperately trying to avoid as they struggle to survive a threat to their livelihoods that is far greater than the one between the armchair epidemiologists duking it out on dueling social media groups. Let’s just settle this right now. If you get online to brag about not wearing a mask, you’re a Karen. If you get online to brag about wearing a mask, you’re a Karen. If you get online to snitch on a business for asking you to wear a mask, you’re a Karen. If you get online to snitch on a business if someone isn’t wearing a mask, you’re a Karen. If you harass people for wearing or not wearing a mask … well, you should get it by now. Stop being Karens. Mind your own business, and for goodness’ sake stop trying to hurt businesses. Because whether you are pro-mask or anti-mask, the thing many if not most of these Karens have in common is nothing at risk. It costs them nothing to fire off a Facebook post telling people to boycott a business. It costs them nothing to claim how awesome they are for resisting or for complying. At a time when literally every customer counts for the small business owners who make up the vast majority of the job creators in this state, your Karening can cost plenty. We can agree that wearing masks is inconvenient for most of us, but some are making up for it generating a dopamine response by telling everyone what they think about it. We have enough to worry about without a bunch of self-deputized TSA agents running around getting into people’s health conditions or whipping out their pocket constitution looking for the amendment that says “thou shall not order me to wear a mask.” If something at a business upsets you and you just have to say something, go half-Karen and talk to a manager. There’s no need to grab your phone and tell the world about it. Never go full Karen. Think about whether your fears or your feelings are driving your actions, and if they are, either adjust your behavior accordingly or adjust your attitude. Because you’re not helping. You’re making this worse, and you’re tearing our community apart. In a polarized world it may be hard to accept that two things can be true at the same time: the virus can reach a vulnerable member of the population if people aren’t careful and ceding any amount of personal freedom to the government is an inch it will routinely turn into a mile. If it helps to relieve the justifiable personal stress of months of pandemic panic that’s been foisted upon us, there is no riper target than the federal government health experts like Surgeon General Jerome Adams or the lovable Dr. Fauci who have admitted they lied to us at the onset about wearing masks. The answer, however, is not to compound the government’s squandering of the public trust through its dishonesty over masks by turning on each other or turning each other in through Facebook groups or [email protected] Don’t be a Karen. In the interest of gender equity, don’t be a Dick, either. Andrew Jensen can be reached at [email protected]

BROWN'S CLOSE: Northern Exposure

Since the onset of the coronavirus, families have lost jobs, childcare, and all semblance of schedule. Barriers are broken, boundaries eviscerated. Days bleed into one another. Friends earnestly text each other, “Happy Friday,” and then ask whether Friday is something we still celebrate. Most of my fellow Americans have given up decorum. Kids burst into the room and enthusiastically participate in client Zoom meetings. Women pick their feet and noses in the virtual presence of friends. Men pee on conference calls. All of this, I suppose, was to be expected. Societal structure evaporated overnight. I am certainly not immune. I’ve worn pants with snaps exactly four times in the past three months. Instead, I now do laundry loads consisting only of gym shorts, sports bras, and sweatshirts. I was mentally prepared for my new casual life. I’ve worked from home for several years as it is, and I live on a quiet cul-de-sac in West Anchorage. The location is perfect. I’m seven minutes from either the airport or Kincaid Park. New houses spring up regularly. There’s talk of another school someday and a fire station. Aside from jet airplanes seemingly landing on my roof every Thursday at 2:30 in the morning, it’s really idyllic. As quarantine and hunker down recommendations have persisted, however, I’ve noticed distinct changes in my neighborhood; my fellow residents have not taken well to quarantine. Unaccustomed to working from home, they have not built up the discipline to maintain societal codes of conduct during a pandemic. My first hint that something was off was on my daily stroll to the mailbox at eleven in the morning. I approached the duplex seven doors down from mine. A large man with a lot of wild hair was standing naked on his balcony holding a chihuahua under his arm. If the stark contrast of the size difference between the dog and his master didn’t complete the astounding sight, the man was attempting to flirt with the hot mom next door. She was at street level, fully clothed, walking her large yellow lab, and gazing up at him with wide, concerned eyes. “Aren’t we a funny pair?” he grinned hopefully. “I’m a big man with a tiny dog, and you’re a tiny woman with a big dog.” I hated to break it to him, but in no universe would he and the hot mom ever be a pair. I assumed this particular gentleman just had no sense whatsoever of propriety. I shrugged off the encounter as a unique story of life in my cul-de-sac. That was until the second incident: – the lady in the house across from mine began regularly parading around topless. She’s flagrant about it, leaving all of the interior lights ablaze. She lives with a baby and a husband, and neither seem to mind. I wish I could be that free. As March faded into April, April into May, and now May into June, I noticed this behavior more and more. There’s one guy who now rubs his nipples vigorously every time he mows his lawn. Another runs around outside his property in his bathrobe and underpants every week on trash day; everything from his clothes on down to his body parts flaps enthusiastically. I reached my breaking point the day the couple a few doors down threw a wild, and very noisy, party at midnight on a Tuesday. Having reached peak curmudgeon status, I pulled on my jacket and my mask, and tramped angrily down the street in my pink pajama bottoms, giant eyeglasses, and my hair teased on top of my head. The door was wide open, and I burst in. “Hey! Who owns this place?” I shouted over the music. I received glowering looks from several young women dressed in heavy eye makeup and nothing but their underwear. More guests flitted through the entryway, similarly undressed. We all regarded each other for a few moments, me in my oversized clothes, and the party goers in their undersized ones. “Sup?” One young man greeted me insolently. “Look, I have to work in the morning. I have –” I paused and spoke the word reverently. “—A job.” “Sorry, we’ll keep it down,” he muttered, and turned the stereo down three-tenths of a decibel. I clumped home, and prepared to relocate to my parents' house. Their neighbors were all over 65 years old, and had long since stopped seeing the fun in parties where all you wear is your underwear. I went up to their house the following evening for dinner, and sat outside on their deck, bathing in the luxury of peace and quiet. The only other humans around were my parents’ neighbor and her friend, both sitting in a hot tub on the neighbor’s deck. It was a hot evening, and the neighbor reached her hot tub limit in short order. She stood up, hopped out of the tub, and wiggled around the deck looking for her towel. She was completely naked, and in full view of all of the residents of my parents' street. She grabbed her towel, and began pulling it vigorously back and forth, drying her nether regions. I stared, dumbstruck, for perhaps longer than was polite. What was most perplexing however, was not the prancing naked neighbor, but her friend. The friend was dressed modestly in a bathing suit, and hot tubbing with her nude friend. I tore myself away, walked inside, and rinsed my eyes out with chlorine. God willing, COVID subsides this summer. Else, the Municipality may have to declare itself an official nudist colony. Granted, this would give me a legitimate reason to finally live out my fantasy of bunker life in Oklahoma. Sarah Brown is a Never Nude. She can be reached at [email protected], and on Twitter @brownsclose1. “Close” is a British term for alley or cul-de-sac. For more of Sarah’s musings, visit Browns-Close.com.

Judge approves bankruptcy sale for Ravn

An auction after the July 4 holiday may decide the future of Ravn Air Group, Alaska’s largest rural airline. Ravn filed for bankruptcy protection in April, and on Thursday, a Delaware bankruptcy judge approved a plan for selling the company in whole or in part to satisfy creditors. A specific date for the auction has not been set. It is expected to take place after July 4 but before a July 9 court hearing scheduled to finalize the sale. A Ravn attorney said he was not allowed to talk to the media about the case. It isn’t yet known who will bid on the airline, but in a written statement Thursday, Ravn Air said that “approximately 30 bidders expressed interest in buying all or some of the air group’s assets. Of these, five strategic buyers submitted bids to buy the entire air group.” “The outcome of today’s hearing turned out as we had hoped, and we are excited that our employees, our customers, and the many communities we serve will now have a very real opportunity to see Ravn back in the skies later this summer,” Ravn CEO Dave Pflieger said in a written statement. Among the attorneys participating in this week’s proceedings were two representing Float Shuttle, a Southern California commuter service. Rob McKinney, the company’s president, said the firm is interested in buying Ravn and getting it operating again in Alaska. “It’s definitely our intent to keep Ravn as a going concern. We’re all about service to communities, and we really believe we have the right team we’re putting together,” he said. Restarting Ravn is only one possible outcome: If the airline isn’t sold in whole or in pieces big enough that it can continue to operate, the bankruptcy plan calls for its assets to be put into a trust and sold to satisfy creditors. Attorneys for creditors have been debating since April whether to end Ravn and sell its aircraft and other aircraft piecemeal, in what’s known as Chapter 7 bankruptcy, or in a manner that would allow the company to continue operating in Alaska or elsewhere. An analysis conducted as part of its bankruptcy proceedings estimated that Ravn’s assets in liquidation would be worth between $21.2 million and $33 million, far less than its debts of $151.5 million to $185.8 million. Before filing for bankruptcy on April 5, Ravn operated more than 400 flights per day using a fleet of 72 aircraft. During the coronavirus pandemic, passenger traffic dropped more than 90 percent. “Because of the current economic circumstances, the debtors’ financial condition, and the substantial working capital needed to restart the debtors’ operations, the debtors have no prospect of generating positive cash flow before 2021 at the earliest,” according to court filings. What will emerge Several longtime players in Alaska’s air service industry said while there may be bids in the bankruptcy auction to take all of Ravn’s assets it is unlikely that an airline will reemerge with a reach close to what Ravn had before it shuttered. Ravn Air Group regularly serviced 118 communities across the state and had approximately 1,300 employees when it stopped flying in early April. The carrier conducted both FAA Part 121 scheduled passenger and freight service to regional hubs with larger aircraft as well as Part 135 air taxi and charter service to smaller communities predominantly with single-engine aircraft through its subsidiary Ravn Connect. Ravn also comprised approximately 20 percent of the charter flight market across much of the state, according to the company. Danny Seybert, former CEO of PenAir, said in an interview that he believes smaller carriers have largely backfilled the space left in Part 135 air taxi and charter service in the nearly three months since Ravn grounded its fleet. “That void has been filled very nicely by very competent carriers,” Seybert said. “Now those communities have better, reliable service.” Residents in many of the communities Ravn served — where it was often the only carrier — had become increasingly critical of the airline in recent years for deteriorating reliability in its business. Ravn purchased PenAir out of bankruptcy in 2018 for $12.3 million. PenAir operated for decades out of Anchorage serving Southcentral and Southwest Alaska. However, an unsuccessful foray into Lower 48 markets strained the company’s finances. Matt Atkinson, an owner of Fairbanks-based Wright Air Service said there it’s possible a smaller air taxi with more efficient routing could arise out of Ravn but he otherwise generally echoed Seybert’s assessment of the situation. “Carriers around the state have stepped up in a major way and absorbed capacity,” said Atkinson, who is also president of the Alaska Air Carriers Association board of directors. Wright operates primarily in Interior Alaska, but began serving some North Slope communities when Ravn shut down. “With the tight markets Ravn did a lot of good things,” Atkinson said. He added that COVID-19 — which Ravn leaders said pushed the company into bankruptcy — has suppressed air travel demand in Alaska’s villages as it has nationwide so the new air taxi market picture won’t be clear until the pandemic is over. Atkinson said Wright Air is one of the bidders for some of Ravn’s assets, but is not interested in the entire airline. Seybert said the scheduled Part 121 side of Ravn’s operations are “a whole different picture” and he sees room for a smaller carrier to operate in that space. Alaska Airlines announced June 22 that it would be flying Embraer 175 aircraft, which can carry up to 76 passengers, to several hub communities across the starting in October through its regional sister airline Horizon Air. Alaska has traditionally flown larger Boeing 737-series jetliners. The major carrier also said in May that it will be serving the Bristol Bay region — formerly a major market for Ravn — year-round once the busy salmon season there wraps up. Alaska previously flew to the Bristol Bay hubs of Dillingham and King Salmon during the summer peak for the commercial fishing and tourism industries. Seybert noted that Alaska Airlines has filled some of the service gaps left by Ravn but added that even the smaller Embraer 175s are too large to service Unalaska and other Alaska Peninsula communities. Unalaska is the busiest commercial fishing town in the country with roughly 55,000 passengers passing through the small community each year, according to Seybert, who said the current situation of mostly charter service is untenable over the long-term. He emphasized that while Ravn’s bankruptcy was a major shake-up to the state’s air service industry, similarly impactful events have happened before. “There will always be a carrier that will step up and meet the needs of the communities,” he said. Seybert declined to comment on whether he is pursuing assets in the bankruptcy auction.

New cost estimate for AK LNG Project shaves off $5B

More than $5 billion has been shaved off the price of the massive Alaska LNG Project in an effort to attract private firms to take over the LNG export plan currently led by the state, Alaska Gasline Development Corp. officials announced Thursday. The latest cost estimate of $38.7 billion is 12 percent less than the $44.2 billion projection made in 2015 when ExxonMobil was leading the Alaska LNG Project in a joint venture with BP, ConocoPhillips and AGDC. AGDC spent the past 14 months looking for ways to reduce the cost of the North Slope gas pipeline and LNG export plan with help from BP, ExxonMobil and global engineering and construction firm Flour Corp. The expected savings largely come from technological and modular construction advancements made in the rapidly evolving LNG industry since the last estimate was made in 2015 as well as updated material and equipment costs and leveraging third-party services, according to AGDC officials. AGDC President Frank Richards said the new cost figures strengthen the development prospects for the long-sought gasline but noted global markets will ultimately determine the fate of the Alaska LNG Project. He said during the Thursday morning AGDC board of directors meeting that the cost savings exceeded expectations and actually totaled $8.5 billion when the $44.2 billion cost from 2015 was inflated to fourth quarter 2019 dollars. “These updates improve the competitive position of the Alaska LNG Project and its ability to deliver LNG and natural gas at favorable prices. We are incorporating these results into our discussions with potential partners as we work to transition to a new market-let project team and maximize project benefits for the State of Alaska,” Richards said in a formal statement. At its core, the project consists of a large North Slope gas treatment plant; an 807-mile buried natural gas pipeline from the Slope to the Kenai Peninsula; offtake points for state use, and a three-train liquefaction plant at Nikiski capable of producing up to 20 million metric tons of LNG per year for export to Asian markets. AGDC has led the Alaska LNG Project since 2017 when the major producers decided depressed prices in global energy markets would prevent the project from generating the returns they deemed necessary to continue investment. The state-led Alaska LNG Project was a priority of former Gov. Bill Walker’s administration but also garnered significant criticism from Gov. Mike Dunleavy and other lawmakers who contend the megaproject is too complex and risky for the state to develop on its own. As a result, AGDC under Dunleavy has shifted to seeking to sell the projects plans and permits to a private firm or consortium likely sometime next year. The previous cost estimate used for the state-led project was $43 billion; AGDC officials explained the $44.2 billion estimate included the expected cost of a payment in-lieu of taxes, or PILT, which a privately-owned project would pay to local governments with project infrastructure within their jurisdictions. Richards said the economic evaluation focused on ways to cut $100 million or more from the Alaska LNG capital costs. The review also found nearly $98 million per year in savings to the expected operating costs of the project, which are now pegged at $739 million per year. BP and ExxonMobil also assisted AGDC with $10 million each to help complete the final work on the project’s environmental impact statement. AGDC received a favorable record of decision from the Federal Energy Regulatory Commission May 21. Matanuska-Susitna Borough officials have appealed FERC’s decision on the project, contending the agency did not adequately consider the borough-owned Port MacKenzie as a viable location for the large LNG plant. Look for updates to this story in an upcoming issue of the Journal. Elwood Brehmer can be reached at [email protected]

Pandemic gives businesses lessons in survival, innovation

NEW YORK (AP) — When the coronavirus outbreak forced Sean Giovanni to shut down his recording studio in for two months, he dropped off mobile equipment at staffers’ and artists’ homes. He hoped remote recording would bring in some revenue. It did. Along with the income, Giovanni got an important lesson that will help his business long after the pandemic has subsided: The Record Shop doesn’t have to be limited to what it can produce onsite. “Moving to strictly remote work over the past two months has birthed some valuable new ideas for how we can serve our clients in new ways,” Giovanni says. From experienced owners such as Giovanni to others who just got started, the pandemic is testing their entrepreneurship and teaching valuable lessons about surviving and innovating, whether it’s doing more business remotely, grabbing the opportunity to make a new product or sacrificing some business to cut down on costs. Owners who are ingenious are learning how to survive the pandemic, and hopefully, to prosper in the future. Nishantha Abeyrathne’s Sri Lankan company, B&B Engineering, has primarily done construction work at garment factories. The work disappeared when the government imposed a 24-hour curfew in March, effectively shutting the country down. Within a week, the government allowed factories to reopen, but they were required to install sinks so employees could wash their hands. Abeyrathne seized upon this opportunity and designed a sink with a foot paddle so workers wouldn’t have to touch the faucet. He ended up producing about 500 sinks, saving the jobs of his 14 workers and temporarily making up some lost revenue. But when the nationwide shutdown ended at in late May, demand for sinks declined and Abeyrathne had no work. “I am now feeling the real effect of the coronavirus,” he says. But Abeyrathne has taken a lesson away from the pandemic: He needs to keep being creative to keep the company going. “I have a lot of ideas,” he says. His next one is to manufacture electrical panel boards for solar energy panel manufacturers. Restaurant owners have had particularly hard lessons, including the fact that social distancing and ultra-sanitary conditions are now as important as what’s on the menu. “This is much more apparent than in the past, where most changes were made off consumer purchases,” says Daniel DeLeon, owner of Grumpy’s Restaurant in Jacksonville, Fla. DeLeon also realizes that his new routine and focus will be standard operating procedure going forward. “These will all stay as permanent policies and practices,” he says. Alex Van Tuijn, co-owner of four cafes in Brussels, has found that staying in business during a pandemic can mean sacrificing some of the very things a company is known for. Van Tuijn was forced to shut his establishments for nearly three months and reopened just last week. But Bar du Matin, a stalwart in the nightlife in the Belgian capital city, is no longer serving breakfast and lunch despite the fact “matin” is French for “morning.” Because social distancing requirements limit the number of people the cafe can serve and in turn, its revenue, staying open all day is too expensive. It’s now open only from 4 p.m. to 1 a.m. “We’ve limited the damage a bit by cutting back on the hours,” Van Tuijn says. Steps like these are necessary to survive — half of Belgium’s 12,000 cafes may not survive the coronavirus crisis, according to an industry association. Even in the easiest of times, many owners who are experts when it comes to their products and service must learn other aspects of running a company. Dentist Matt McGee found that operating during a pandemic required a different level of knowledge and skills. Like other dentists and medical professionals, McGee has spent hours learning about the virus; while he’s trained in procedures to limit infections, the coronavirus has been new territory for him, and the information and advice about precautions has frequently changed. Meanwhile, the staffers of his Nashville, Tenn., office, like all dental office workers, are at high risk for exposure to the virus. They turned to him for information and guidance, for example, on wearing masks and face shields, and he didn’t always have the answers. “It frustrated me to not be able to give guidance, and as a business owner, you have to be able to deal with chaos like this and still remain calm and in control,” says McGee, whose practice was closed for two months. While successful business owners are planners, always thinking about what’s next, the virus outbreak has taught them they need to come up with blueprints for survival. Lina Mokrane spent France’s two-month shutdown trying to come up with ideas for keeping her Paris boutique going, knowing that when she reopened, established customers likely wouldn’t be shopping. Mokrane, who designs and sews her fashions, realized she should use her talents to create custom-made masks. In the process, she got 100 new customers to sell her clothing to going forward. But if sales remain weak, Mokrane’s Plan B will be to partner with another business owner; for example, a tailor who just sold his business after 25 years in the neighborhood. She also has a Plan C: inviting another designer to share her studio. If all else fails, she’ll close the shop but keep producing her clothes. “I have to adapt, if I’m going to save the company,” she says.

How ‘maximizers’ can cut decision-making angst

No one wants to waste money, but some of us go overboard trying to get the best possible deal. I have spent nearly as much time researching which hiking socks to buy as I have choosing a new car. Others of my species — we’re called “maximizers” — might miss locking in a good mortgage interest rate while waiting for a better one. Our determination to make the optimal choice means we’re often plagued by buyer’s remorse as well as decision paralysis. Maximizers are the polar opposite of “satisficers,” people who make decisions once they’ve found an acceptable choice. Maximizers’ high standards mean we often get better outcomes, such as jobs that pay more, says financial therapist Kristy Archuleta, associate professor of financial planning at the University of Georgia. But maximizers also have more anxiety about making decisions, which can lead to second-guessing our choices or being unable to choose at all. “Because you’re always trying to look for what’s the best possible decision or the best possible choice you can make, you can become stressed about it,” Archuleta says. “The more choices you have, the harder it is to make a decision.” Satisficers don’t have that issue. (“Satisfice,” a combination of “satisfy” and “suffice,” was coined by economist and psychologist Herbert Simon in 1956.) Satisficers have more modest standards for making choices. They may research, but only to find an option that achieves their goal. They’re generally pleased with their choices and don’t worry that there might have been a better one. I doubt a hard-core maximizer could turn herself into a blissed-out satisficer overnight, even if she wanted to. But tempering our desire to make the “best” choice could help us make decisions faster and with less angst. Understand the why Archuleta suggests asking ourselves why we think we need to make perfect choices. Maybe a previous purchase went horribly wrong — we bought a car that turned out to be a lemon, for example, and couldn’t afford to replace it. Perhaps we were cheated or defrauded, which left us unwilling to trust and convinced we can’t rely on anyone’s help. Or maybe we think we aren’t allowed to make mistakes, lest we be seen as the imperfect humans we are. Exposure therapy might help as well, Archuleta says. This technique encourages gradually facing our fears and anxieties, rather than avoiding them. If you tend to obsessively research even small purchases, buy a $10 or $20 item without researching it at all, she suggests. Notice how that feels, and then do it again a few times. Your anxiety about not vetting multiple options likely will fade as you do so, she says. Create a framework Take a page from satisficers and focus on your goal, rather than on all the available options. It may help to write down your top two or three priorities. Let’s say you want to refinance your mortgage. Your priorities might be to get a competitive rate (not the lowest, perhaps, but certainly not the highest) and to lower your monthly payment enough to recoup the costs within a year. You shop around just enough to find a loan that meets those criteria, and then apply. Finding a few, trustworthy resources can give you reassurance that you’re making a good choice, even if it’s not the absolute best one. Personal finance sites might offer reviews of your lender, for example. If you’re buying a product, you can consult a solid review site such as Consumer Reports, Good Housekeeping or CNET. Focus on what matters When I fall down the rabbit hole of endless research, I can often stop myself just by asking, “How important is this, really?” My life won’t be significantly worse if my hiking socks wear thin too fast. Other decisions, such as buying a house or a car or hiring a financial planner, deserve more — but not endless — consideration. If buyer’s remorse starts to creep in once you’ve committed, Archuleta recommends reality-testing your thinking: Would your life really be vastly better if you’d chosen something else? Then she suggests resolutely turning your mind to positive aspects of your choice. “Focus on all of the things that are good about making this decision,” Archuleta suggests. “And focus only on those things.” This column was provided to The Associated Press by the personal finance website NerdWallet. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score.” Email: [email protected]

LNG shipments by rail approved amid pipeline battles

HARRISBURG, Pa. (AP) — The Trump administration has taken the final step to allow rail shipments of liquefied natural gas, a new front in the movement of energy products that had been opposed by environmental groups and 15 states. The U.S. Pipeline and Hazardous Material Safety Administration published the rule late last week for shipments of the flammable and odorless liquid known as LNG. “The department’s new rule carefully lays out key operational safeguards to provide for the safe transportation of LNG by rail to more parts of the country where this energy source is needed,” Transportation Secretary Elaine Chao said in a statement. The rule comes amid foundering prices for natural gas in the U.S., as court and regulatory battles over pipeline projects have slowed movement of the nation’s world-leading gas production to markets. The rule requires enhancements — including a thicker outer tank made of steel with a greater puncture resistance — to the approved tank car design that, for decades, has been approved for shipments of other flammable cryogenic materials, such as liquid ethylene and liquid ethane. The rule takes effect in 30 days after it was published. Previously, federal hazardous materials regulations allow shipments of LNG by truck, but not by rail, except for with a special permit. The Sierra Club accused the Trump administration of “selling the country out to the fossil fuel industry” for dangerous shipments that will travel past homes, schools, businesses and environmentally sensitive areas. “This new rule has major impacts on rail safety because the dangers of a possible derailment, spill, or explosion would be catastrophic,” Jeff Tittel, director of the New Jersey Sierra Club, said in a statement. “This is an accident waiting to happen.” Some of New Jersey’s train tracks, he said, are a century old or more and aren’t designed to handle such dangerous cargo,” Tittel said. The protesting states included Pennsylvania and New Jersey, where the Trump administration issued a special permit in December to ship LNG by rail from northern Pennsylvania’s Marcellus Shale natural gas fields to a yet-to-be-built storage terminal at a former explosives plant in New Jersey, along the Delaware River near Philadelphia. From there, the LNG is expected to be exported to foreign markets for electricity production, although the applicant, a subsidiary of New Fortress Energy, has told federal regulators that some domestic industrial use is possible. The states had argued that the trains will share tracks with passenger trains and travel through congested areas. Other objecting states were California, Delaware, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, Rhode Island, Vermont and Washington, as well as the District of Columbia. The new rule was first proposed in October and comes after President Donald Trump’s executive order last year that, in addition to seeking to speed up oil and gas pipeline projects, directed the transportation secretary to propose a rule allowing LNG to be shipped by rail. An industry trade group representing major freight railroads in North America also had sought the new rule.


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